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Law School Record, vol. 69, no. 1 (Fall 2022)
Get PDFMessage from the Dean Shining a Light on Data The \u27Comic-Con of Tax\u27 The Making of an Entrepreneur Kenneth W. Dam, 1932-2022 Robertson, Goldin, and Davidson Join Faculty Finding a Way Forward Graduation 2022 Development News: Gift from Richard M. Lipton, \u2777 Alumni in Memoriam Meet the Class of 2025https://chicagounbound.uchicago.edu/lawschoolrecord/1152/thumbnail.jp
The Promise and Perils of Open Finance
Get PDFWe are at the dawn of a new age of Open Finance. Open Finance seeks to harness the potential of new platform technology to enhance customer data access, sharing, portability, and interoperability—thereby leveling the informational playing field and fostering greater competition between incumbent financial institutions and a new breed of fintech disruptors. According to its proponents, this competition will yield a radical restructuring of the financial services industry: offering more and better choices for consumers looking to make fast payments, borrow money, invest their savings, manage household budgets, and compare financial products and services. The promise of Open Finance is very real. Yet its proponents have largely ignored the economics driving the development of the key players at the heart of this new infrastructure: data aggregators. Data aggregators are the connective tissue of Open Finance—the pipes through which the majority of this valuable data flows. Like other types of infrastructure, these pipes are characterized by economies of scale and network effects that erect substantial barriers to entry, undercut competition, and propel the market toward monopoly. In the United States, these dynamics are compounded by the highly fragmented structure of both the conventional financial services industry and the emerging fintech ecosystem. The result is an embryonic market structure in which a small handful of data aggregators have a massive head start, and where one in particular—Plaid—arguably already enjoys a dominant market position. This Article describes the promise and perils of Open Finance and explains how policymakers can tap into its potential while simultaneously preventing the abuse of monopoly power and avoiding the creation of a new strain of too-big-to-fail institutions
Toward a Tender Offer Market for Labor Representation
Get PDFAmerican workers are not sharing in the robust growth of the economy. Traditionally, large numbers of workers sought to improve their lot by bargaining collectively through unions. But the strategy does not seem to be working for enough workers. Despite some renewed recent activity, private sector unionization rates remain below 10%, and the unions that are in place have struggled to perform well, either in avoiding scandals or in delivering significant returns to workers in the form of job security or wage growth. This Article proposes a radical fix to the problem of declining unions. Drawing inspiration from corporate governance and its success in delivering financial returns to shareholders, the Article proposes allowing pro-worker investors to offer workers cash upfront for the right to represent them. If an investor succeeds in persuading a majority of workers in a workplace, the investor would be certified as the exclusive bargaining representative for the workers, and would be entitled to a percentage of any wage gains it obtained for the workers through collective bargaining. The resulting market for union representation would deliver cash to workers upfront, allow investors to demonstrate their capacity for delivering concrete results to workers, and attract resources to the cause of improving workers’ conditions of employment. The proposal’s new methodological approach also provides a lens for a constructive reevaluation of the objectives and tactics of American labor law
The Expanding Universe of Bilateral Labor Agreements
Get PDFIn the seventy-five years since the end of World War II, pairs of countries have entered into over a thousand bilateral labor agreements (BLAs) to regulate the cross-border flow of workers. These agreements have received little public or academic attention. This is likely, in part, because there is limited data or easily available information on BLAs. This Article hopes to change that by introducing three new resources: (1) a dataset documenting the formation of over 1,200 BLAs; (2) a corpus including the texts of over 800 BLAs; and (3) a dataset coding whether over 500 BLAs mention twenty topics that the ILO has identified as best practices for these agreements. Using this data, we show that, unlike some other forms of bilateral agreements, the rate of BLAs being signed has remained relatively high during the first two decades of the twenty-first century. Additionally, we also show evidence that, although many BLAs were formed during this period, relatively few agreements include various worker protections advocated for by activists, scholars, and NGOs
The Consequences of the TCJA’s International Provisions: A Conceptual Framework and Survey of the Evidence
Get PDFThe 2017 US tax legislation - widely referred to as the Tax Cut and Jobs Act (TCJA) - fundamentally transformed the US system of international taxation, introducing for instance a new tax on “Global Intangible Low-Taxed Income” (GILTI). This paper develops a simple conceptual framework that synthesizes and extends the theory of multinational corporations’ (MNCs’) responses to taxation. It also surveys the emerging empirical evidence on the consequences of the TCJA’s international provisions. The conceptual framework focuses on the efficiency costs of ownership distortions in analyzing the impact of the GILTI tax and the prior repatriation tax on foreign acquisitions by US MNCs. The paper derives a set of sufficient conditions under which changes in US MNCs’ foreign activity in response to the TCJA imply an unambiguous reduction in both US national welfare and global welfare. Drawing on the empirical literature on the impact of the TCJA, the paper documents five robust findings: the TCJA led to a general decline in US MNCs’ foreign acquisitions, increased US MNCs’ investment in routine foreign tangible assets, led (at most) to a decline in profit shifting to the extent expected from the TCJA’s tax rate reduction (suggesting no impact of its international provisions per se), reduced the market value of US MNCs relative to domestic US firms, and had no detectable impact on domestic US investment and wages. The first two of these findings correspond closely to the model’s sufficient conditions for an unambiguous decline in US and global welfare, while the other findings provide additional support for this conclusion. An illustrative calculation based on the magnitude of the first effect suggests that the TCJA nearly doubled the synergy losses associated with US taxation of US MNCs’ foreign activity
The Anti-Democratic Major Questions Doctrine
No full textWest Virginia v. Environmental Protection Agency1is the Supreme Court’s most important administrative law decision in decades. The opinion’s significance is due principally to the Court’s embrace of an aggressive version of the so-called“major questions doctrine”(MQD), which appears to require unusually explicit statutory authorization before agencies may undertake“major”regulatory actions. The West Virginia Court claims that this strong MQD is based on longstanding precedent, and that its use has salutary effects on the policymaking process.Neither claim is accurate. In Part I of this Article, we show that the strong version of the MQD embraced by the West Virginia Court is in fact relatively new; the extent of the doctrinal innovation is obscured by the fact that the MQD label has been unhelpfully attached to several related but distinct interpretive techniques, which we disentangle. In Part II, we turn to the impact of this new MQD on the policymaking process, focusing in particular on democratic accountability. While the MQD’s proponents claim that this doctrine protects separation-of-powers principles and the prerogatives of Congress, in fact the new MQD is more likely to weaken democratic accountability by shifting power from the elected branches to the courts, undermining transparency, and exacerbating the already excessive tendency toward minoritarian obstruction in Congress. The West Virginia Court’s aggressive MQD would likely have other effects; perhaps most importantly, this version of the MQD makes it much more difficult for the federal government to address new problems under broadly worded statutes. Both the MQD’s supporters and its detractors anticipate that the doctrine will result in less, and less aggressive, federal regulation. For purposes of this Article, though, our critique of theMQD focuses less on its impact on policy outcomes (though we think this is very important), and more on the impact of the MQD on the policy making process, especially the extent to which the MQD makes that process less democratic
Promoting Regulatory Prediction
Get PDFIt is essential for environmental protection that private actors be able to anticipate government regulation. If for instance, the Biden Administration is planning to tighten regulations of greenhouse gas emissions, it is imperative that private companies anticipate this regulatory change now, not a few years from now after they have constructed even more coal- and gas-fired power plants. Those additional power plants will mean more irreversible greenhouse gases, and these plants can be politically challenging to shutter once built. The point is general to private actors making decisions in the shadow of potential government regulation. Better information about future government actions is thus critical for the benefit of both private actors and society at large. In this Article, we consider market-based and non-market-based means by which to generate information about future government action. We find no perfect answer.
We consider three market-based solutions prediction markets, the use of equity markets to hedge against future government action, and machine-learning and predictive technologies and three government-based solutions greater transparency, the development of intellectual property rights in predictive information, and prediction-forcing regulation, which is regulation that requires private actors to make public predictions about future government action. None of these is a panacea. The market-based solutions founder on the limitations and thinness of markets. Government-based solutions come with significant structural downsides related to the division of authority among different levels of government (federal versus state versus local) and different branches of government at each level (executive versus legislative). We conclude that prediction-forcing regulation may be the most promising avenue, though it too is likely not a full solution
Procedural Losses and the Pyrrhic Victory of Abolishing Qualified Immunity
Get PDFWho decides? Failing to consider this simple question could turn attempts to abolish qualified immunity into a Pyrrhic victory. That is because removing qualified immunity does not change the answer to this question; the federal courts will always decide. For an outcome-neutral critic of qualified immunity who cares only about its doctrinal failures, this does not matter. But for the vast majority of critics who are outcome-sensitive, meaning they care about qualified immunity because of its role in police accountability, this is a troubling realization. Building on earlier work on the equilibration thesis, as well as on qualitative and quantitative analysis of both the entire federal judiciary and the recent spate of Trump appointees, this Article argues that absent qualified immunity, courts are likely to issue more merits decisions against the plaintiffs that outcome-sensitive critics care about. These merits decisions would not only be necessarily broader than a decision on qualified immunity’s “clearly established” prong but may be entrenched for decades because of the current liberal-led attempts to strengthen stare decisis.From this specific discussion, the Article takes a general lesson. As the political economy around advocates changes, they must reevaluate the tools at their disposal. Old friends may become foes and former enemies may become saviors. This lesson underlies many of the current debates about the role of various institutions, such as those surrounding court reform and the distribution of federal-state and state-local power. This Article makes this lesson explicit and extends it to the realm of constitutional litigation. In that realm, advocates and policymakers should prefer procedural losses to merits or justiciability decisions because hostile procedural doctrines can be modified by the political branches, while substantive and justiciability doctrines are solely the province of the courts.
Finally, by combining the question “who decides?” with the nascent literature on power-shifting, this Article suggests a way for qualified immunity’s outcome-sensitive opponents to go beyond least-bad losses to actual wins. Such individuals should focus their considerable political will on encouraging legislation that raises the floor of substantive rights and empowers the communities most affected by police violence, thereby shifting the power to decide away from the federal judiciary
Do Prostitution Laws Affect Rape Rates? Evidence from Europe
Get PDFWe identify a causal effect of the liberalization and prohibition of commercial sex on rape rates, using staggered legislative changes in European countries. Liberalizing prostitution leads to a significant decrease in rape rates, while prohibiting it leads to a significant increase. The results are stronger when rape is less severely underreported and when it is more difficult for men to obtain sex via marriage or partnership. We also provide the first evidence for the asymmetric effect of prostitution regulation on rape rates: the magnitude of prostitution prohibition is much larger than that of prostitution liberalization. Placebo tests show that prostitution laws have no impact on nonsexual crimes. Overall, our results indicate that prostitution is a substitute for sexual violence and that the recent global trend of prohibiting commercial sex (especially the Nordic model) could have the unforeseen consequence of proliferating sexual violence